New labor law causes workers more distress

New labor law causes workers more distress

Ridwan Max Sijabat, The Jakarta Post, Jakarta

A labor union has cried out against the nationwide trend of
outsourcing, labor layoffs and dismissals that have helped
employers raise efficiency levels amid the prolonged economic
hardship, but have worsened workers' situation.

Muda Alexander Sinaga, chairman of the Pharmaceuticals, Health
and Services Trade Union, a member of the All-Indonesia Workers
Union Confederation, said following the March 2003 enforcement of
the controversial Labor Law No. 13/2003, outsourcing had become a
nationwide trend for companies to cut down labor costs.

"Thousands of workers return home jobless almost every week
because their contract was not extended after two or three years
on the job, or many companies lay off a great number of their
workers and then dismiss them," he told The Jakarta Post on
Wednesday.

Sinaga also cited another trend, that many private and state
companies had cut labor costs by changing the status of their
permanent workers to contract workers.

"Many companies have 'forced' workers, who have been working
for a company for over 10 years, to resign of their own will, and
then rehire them as contract workers to raise efficiency," he
said, adding that employers made the move after procuring
approval from the Central Committee for the Settlement of Labor
Disputes (P4P).

Unlike the previous law, Labor Law No. 13/2003 has sparked
strong opposition from numerous labor unions, as it allows
employers to lock out their companies, lay off workers and even
dismiss workers for reasons of efficiency or bankruptcy.

The government recently gave approval to the management of
state-owned aircraft manufacturing company PT Dirgantara
Indonesia in Bandung, West Java, to lay off around 6,000 of its
9,350 workers for efficiency purposes. Dirgantara then dismissed
them after it decided to close down several divisions in the
holding company.

The P4P and Minister of Manpower and Transmigration Jacob Nuwa
Wea, who has veto power, have permitted dozens of companies to
lay off workers and dismiss them for similar reasons.

On Wednesday, thousands of workers took to the streets in
Semarang, capital of Central Java, to protest the increasing
labor layoffs and dismissals in the province. The following day,
thousands of workers went on a similar strike in Medan,
provincial capital of North Sumatra.

In a separate case, over 150 of the 1,600 laid-off workers of
publicly listed PT Sarasa Nugraha in Tangerang, Banten, spent
eight nights at the manpower ministry, demanding the government
enforce the P4P's ruling that the management pay workers their
salaries for the last seven months and maximum severance pay as
stipulated in Article 150 of the Labor Law. The P4P had also
approved on July 7 the management's dismissing the workers.

Alboin Sidabutar, chairman of the Textile, Garment and Leather
Trade Union, said the prevalent outsourcing and dismissals of
workers were inevitable, since Indonesia could not compete in the
era of free trade and globalization.

"Many labor-intensive companies in the textile and leather
industries have closed down operations and dismissed their
workers, because their products cannot compete with similar
products from other countries such as China, Thailand and
Malaysia," he said.

Gandhy, director of industrial relations at the manpower
ministry, confirmed that labor disputes had generally been on the
rise, mainly because of misinterpretations of the new labor law.

The ministry's director general of industrial relations, Muzni
Tambusai, concurred recently and said the ministry was in the
midst of preparing a decree to regulate outsourcing and the use
of contract-based workers.

"The decree will declare that companies are allowed to
subcontract certain jobs not included in their core business to
other companies, but the outsourced company is required to
recruit and employ permanent workers in accordance with the law,"
he said.